The past few years have seen a large boom in MTG speculators and financial experts. It seems every significant online retailer has at least one finance writer. Follow enough MTG people on Twitter, and you’ll inevitably believe everyone has an opinion on everything related to MTG Finance.

After all, there are now 155 pages in The Source’s finance/card prices thread. Read through a few pages and you’ll quickly agree - everyone has an opinion.

The rapid influx of people interested in the game’s monetary aspect is intriguing and today I'll analyze the driving force. This is important to understand because I feel some people believe MTG speculation is the best way to achieve certain goals, while surely there are superior alternatives. It all relates back to the predictability of our human nature to behave irrationally.

Living the Dream: Going Infinite

Many players (including me) have a goal of funding their MTG hobby through savvy trades and wise investments in cardboard. We stock up on dozens of a hot card that may see a spike in value. We dig deeper into the metagame to identify the potential break-outs, and we go after aggressively priced Legacy staples to trade down into profit.

All this is done with the hope that we can slowly build our collection and essentially enter a few tournaments for free. Making money is nice – making money while doing something we love is living the dream.

This optimistic outlook is inspiring, but the thought process is inherently flawed. For example, what is the opportunity cost of my owning 40 NM Revised Dual Lands, a few sealed booster boxes, and a lineup of other Standard and Legacy playables? The collection may be appreciating and I love having a hobby that nets me cash but is this really optimal from a financial standpoint?

(chart courtesy of blacklotusproject.com)

Once in a while I will observe price trends showing an increase here and a decrease there, which then impacts my MTG portfolio by a fraction of a percent. On a rare occasion, I will make a killing on a card like Scroll Rack or Food Chain thanks to some sudden hype. But aren’t there other investment opportunities passing me by in the meantime?

While I am slowly making bank on a couple sealed booster boxes of Unhinged, my [Wall Street] stock portfolio is experiencing rapid price swings weekly. While I may be profiting hundreds of dollars in my Magic hobby, my retirement fund is advancing by the thousands. Others may even have access to additional opportunities – real estate, commodities, currencies, etc.

So again I need to ask the question: why are we so interested in sinking hours of our time into research in order to gain an amount of money we could make in a month of passive investing? It cannot be simply to fund our hobby. There are many other opportunities out there to make some cash which carry less risk than a collectible card game. (Note: exceptions would be the ultra rare and unique cards, which are more like an investment in art than in a risky stock).

Enjoyment

One level deeper we discover a stronger motivating factor – the fact that we enjoy the adventure. Before I actively dealt in cards, I would leaf through a trade partner’s binder and drool in jealousy over the value within. Each time I asked myself: how was it possible that someone could possess such a valuable collection without spending tens of thousands of dollars in booster packs?

Now, after actively buying, selling, and trading Magic: the Gathering cards for a few years, I have seen so many cards pass through my fingers. The once intimidating fifty dollar trades can now be made at the blink of an eye. I barely have to think twice before making a $100-$200 purchase if I am confident value could be made. Practice has made me even more adept at scouring the internet for deals.

But, in all honesty, the Legacy boom was really the only catalyst to a gigantic price bump in my collection. Without beating the majority of the playing field to this format, it’s very possible I could not have come this far. While it is inspiring to try and find the next boom in the game (EDH, Modern, etc.), I really haven’t made such a large percentage in profit since.

If my goal was to enhance my trading experience by acquiring higher valued cards, couldn’t I simply invest the cash in the stock market and take profits/dividends and use them to purchase cards? This would still net me the valuable cards with which to trade while not taking on the high risk of investing in a card game. It seems there must be more to the hobby that is motivating me to invest so much time and money to simply earn a few bucks.

Deeper Understanding of Human Motivation

There is a unique aspect to dealing in Magic Cards that I cannot experience when trading stocks – the personal interactions.

The enjoyment I have in dealing in Magic Cards, making a solid prediction, and profiting on a speculation all carry a value unmatched by my stock investments. This is really the driving force behind my desire to deal in cardboard. When I do profit successfully, the hobby is even sweeter. But even if my portfolio remained neutral in value year on year, I would still be enjoying a hobby, networking with a great community and hopefully making a difference.

In a way, these different levels of accomplishments from MTG trading is relatable to Maslow’s Hierarchy of Needs.

On the safety level, one needs to have finances in order to sustain the hobby. Thus, we are motivated to simply gain value when on this level.

One level higher (love/belonging), we start to make connections and develop friendships when we participate in the hobby. This is where the distinction between investing in Magic Cards and investing in real estate / the stock market starts to manifest itself. I love being able to share speculation ideas in the QS forums and swapping success stories on Twitter. While this can still be done to a degree with the stock market, there are subtle differences.

At the esteem level, one develops a level of confidence and respect within the MTG community after some successful speculations. In my view, this is where I am currently operating. I love making a few bucks on the game and making connections, but gradually earning respect from the MTG community is immensely rewarding. Despite the fact that I’ve done fairly well in the stock market, I will never have the same level of respect on Wall Street as I do within the MTG community.

This is why I speculate.

Self-actualization

In an ironic sense, I am attempting to transcend to the level of self-actualization by writing about self-actualization. What I mean is that I am thinking creatively about MTG Finance and sharing thoughts that no other writers have done in the past.

Writing that one should buy Temporal Mastery and sell Snapcaster Mage soon really only addresses the safety level of the hierarchy above. (Disclaimer: I currently own no Temporal Masteries but I may pick one up soon if I feel demand may pick up).

(chart courtesy of blacklotusproject.com)

Even articles about trading and fostering a healthy culture only crack the esteem level. But taking a step back, analyzing the game for what it is and identifying underlying human motivators in a creative way – that is a level on its own.

Sometimes such articles are a hit, and other times the risk may not pay out. But, in the end, I believe these conceptual articles are insightful in their own way, just as I participate in MTG speculation for my own unique set of motivations.

I’ve analyzed why I’d rather spend 10 hours to make $100 in Magic trading than 10 minutes to make $1000 in the stock market. I’d challenge you to consider how much time you’re spending on the hobby and how much profit you’re netting.

I’m not only in it for the money. Are you?

-Sigmund Ausfresser
@sigfig8